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- [00:00]
A
First of all, like, hey, we're gonna launch a new guitar. It looks just like a telly. And it's a telly, but it's not called telly. Reject it. No, this is stupid. I watched a meaningful portion of your two hour segments yelling about the new guitar brand.
- [00:12]
B
It was fun.
- [00:13]
A
And then they tried to like double face stuff to make it look better. And I said, right, take that out the Know youw Gear podcast.
- [00:21]
B
About a year ago, I sat with the CEO of Guitar Center, Gabe Delporto, and let him explain his ideas on how to improve the retail experience for us guitar players at Guitar Center. And I reached out to them a year later to see if they would let me speak with him again to see did any of those ideas work? If so, which ideas worked, which which ideas didn't and how did they adjust or did they adjust at all? And what you're about to see is a very candid conversation. He was extremely forthcoming with information. So let's get to it. So how do you want to start this? You want to.
- [00:52]
A
I'm an open book. You can ask me anything. We're at the Westlake Village Guitar Center. This is the store that's closest to our head office. We're standing in the guitar area.
- [01:01]
B
And bass. Guitar and bass. The bass player.
- [01:03]
A
Everybody forgets bass players. I know. Yeah, yeah, always. But you know, if you want to actually play in a band, the best thing to be is a bass player. That's right. Everybody needs a bass player.
- [01:13]
B
Yeah, you got, you got. Do you have bass player jokes? I have tons of them.
- [01:16]
A
Give me a joke.
- [01:17]
B
You know why every bass player misses their second lesson?
- [01:20]
A
Why?
- [01:20]
B
Because they're on their way to their first gig.
- [01:22]
A
This is a good one.
- [01:25]
B
Since. Since we last talked, I have dedicated myself to more in store experiences.
- [01:32]
A
Okay.
- [01:33]
B
Right. Cuz at the time we talked, I obviously like everybody goes to Guitar center. But I was doing. I personally, my personal shopping was more online based and then smaller. Mom and Pops, obviously still that, that's still part of that too. Here's things I noticed. And so that's why I'm going to ask you to see if I'm paying attention correctly. To me now, when I go into Guitar Centers, there's definitely two guitar centers that I'm going to. One, there's no lock. Not unlocked. There's just no locks.
- [01:55]
A
Yeah.
- [01:56]
B
And then the other store, it's always the wallpaper of amps.
- [01:59]
A
The old Marshall amps in the background.
- [02:00]
B
Right. One store, half the amps on that wall don't exist. Anymore, all those crate amps that doesn't exist anymore. All those old line six amps.
- [02:07]
A
The music industry is a graveyard of brands. Yes.
- [02:10]
B
Like I said, I notice, like I said, some stores no locks. Some stores locks where they don't lock them anymore. And then I've seen in some stores now they're gone back to some form of locking some of the guitars.
- [02:24]
A
So let me explain all of that. Right. We gave the directive to unlock all guitars under $5,000.
- [02:32]
B
Okay.
- [02:34]
A
And our stores did that. And mostly it worked. Okay. Some stores, you know, a significant minority of stores are in just high crime areas.
- [02:43]
B
Sure.
- [02:44]
A
And people would just walk in and thank you very much and walk out. And so some of them we had to put additional lock. There was no stores where all the guitars are locked. But there are some stores where we've had to go down to like $2,000 or something where it's just truly in a like a high crime area.
- [03:02]
B
What I've noticed going to the stores. So I've been to 11.
- [03:05]
A
Okay.
- [03:05]
B
In the last. So let me just tell you. So in the last, you earned a
- [03:09]
A
job as a district manager.
- [03:10]
B
Yes, I know, but kind of maybe. So since I met you last year, I've been to 11 guitar centers. I bought 28 things.
- [03:18]
A
Wow.
- [03:19]
B
Yeah. And a variety some online. Right. So I've had used new all the experiences. In fact, I'm not, I'm just saying this. I looked, I was doing some, you know, data because I'm like, I'm gonna meet with Gabe and let's look at the data. I've spent more in the last 12 months at guitar Center. I have my whole life. So my.
- [03:35]
A
The interview was a success.
- [03:36]
B
Yeah. Apparently I was like, oh, I think I'm more. Right. You made a comment in the last podcast that we did and the comment was, you don't want to play their game. You're going to play basically your game. I don't, I'm paraphrasing. I don't want to change what you said, but that's essentially that completely.
- [03:50]
A
Right.
- [03:50]
B
And I'm like, okay, that's a good point. And maybe my problem when talking to you was I'm viewing through the lens of the Internet only, you know, like click. How fast can you deliver it? How fast? But okay, what about in store? So I go, well, I'll spend more time in stores. Maybe I'll see from your lens.
- [04:05]
A
Right.
- [04:06]
B
So here's things I can tell you that I learned you sections pretty awesome. It's a little tricky online. Focus, single Shots that you guys used to mostly do.
- [04:15]
A
I would love to even just drill in on the pictures piece.
- [04:18]
B
Yeah, sure.
- [04:19]
A
Like, part of that was technology. Part of it. Like, if you, if you look over here, the terminals our employees have to use are green screen. They look like something in, you know, Delta Airlines in 1983. Right. Because it was literally coded in 1983. This is like this archaic system. And we've been. So you used to have to, if you wanted to take pictures, employees would have to, like, grab a camera, take pictures, put it, take the card and plug it into that terminal, upload it, email it to someone else, and it got posted online. It was terrible. So we basically built, you know, we have an iPhone. Everybody gets an iPhone while they're in the store. And we've put basically all the functionality of that thing onto the iPhone, including taking pictures. So now they can just use an iPhone, take pictures. It's instantly uploaded. We're automating the whole process to make it much easier for them so they spend less time just fighting with our systems and more time servicing customers. And we set expectations of. And you got to take good pictures. That got us kind of to here. But then as I go onto our website, I'm still not satisfied. And so we said, okay, well, what's the next thing? So the thing we're rolling out right now is in the stores, there's associates, there's sales managers who are on the floor working with the sales associates and coaching them. Those sales managers are now individually accountable for the quality of the photos of every used guitar on the wall. Right. And if we start to go on the website and we start to see poor quality photos, we know who to go to. That person who allowed their team to upload the photos, and then we coach them. So it's all about, like, leadership, is about accountability. Oh, yeah, Right. And so now we're starting, we're just starting to do this. So you should see over the next three to six months, a significant improvement from where it is today as the sales managers become accountable.
- [06:17]
B
It was hard for me to beat you up on that because like I said, the improvement from where you started to where you are now, but it's
- [06:23]
A
still not good enough now. Yeah, I'm with you. Yeah, I'm with you. And every once in a while, like, you'll see just like the hero image is like, you know, the headstock and it's like, that's really unhelpful. Right.
- [06:35]
B
The hero image is the first image you see when Guitar center takes a Picture. So obviously, you want to see the instrument in a main wide shot and then slowly go through and get more detailed or different angles of the picture. That's what he means by hero image. I made a joke online that I've not yet been in the restrooms to see if they're clean. But Michael Nielsen from the Big Hairy Guitars Channel, amazing player. I convinced him to trade a bunch of his gear in at the guitar center, and he sent me a message to tell you that he had to use the restroom. It was great.
- [07:06]
A
You know, someone very, you know, smarter than me once once told me, the condition of your restrooms tell you. Tells you how much you care about your customers. Right. And. And so whenever I visit stores, I'm always going to the restrooms, and if they're dirty, I'll clean them. It sets a little bit of a tone. Right. So the expectation here is, like, if you walk into a restroom, it should be clean, and you should feel comfortable having your family coming in. And then the same person said, the condition of the break room tells you how much you care about your employees. So that's a constant battle for us, is make sure the restrooms are clean, make sure the break rooms are clean. You know, show people you care about them.
- [07:50]
B
And then this is the pedal station. I've bought a lot of pedals from you guys in the last year.
- [07:54]
A
A lot.
- [07:55]
B
Mostly used. So the pedal stations really didn't apply to.
- [07:57]
A
These are more new.
- [07:58]
B
Yeah, yeah. So I really don't have a lot of reference. How do you feel in the last year this has worked out.
- [08:04]
A
I just love the pedal stations. First of all, if you go into a guitar center, people are using them, so that's a win. If you.
- [08:13]
B
And they used to. And to my experience of it, usually younger people. Yeah, I usually see younger people at them messing with stuff.
- [08:19]
A
You know, this is. This is such a deep rabbit hole, like dialing in your tone. And it's so hard, and it's so like, every one. Every one of these is a different effect. And then you have all the settings and, you know, to really learn how to craft sound and to figure you have to try it. You just have to try it. This all used to be locked up behind glass. And so you'd have to go ask the salesperson. They get a key that unlock it. They bring one out, then you want another one. You got to go get a salesperson. Like, that's a terrible process. And so the whole idea here is just make it easy for people to explore sound, to dial in their sound to try different things. And they can buy or they cannot buy, but it's an experiential piece of purchasing pedals, but of exploring music. And when we think about why we exist as a company with brick and mortar.
- [09:11]
B
Right.
- [09:11]
A
You can buy everything online, right? Right. You don't need guitar center, but you can't get this at an online provider. Right. The ability to like learn, explore, touch, feel, hear, dial in what you really like. Same with guitars. Like that is our reason for being. And that's why we unlock the guitar so you can just play them. That's why we put together pedal tables, so you can just play them. What we're focused on is making sure as much as possible, the instruments are available to experience. Because that's the thing that we can do that online competitors can.
- [09:42]
B
I'm just curious, so since you've implemented this, do you track it in a, hey, we're seeing an uptick in sales, or do you not care because just overall customer experience has improved? And that's. So which metric do you kind of lean towards for this?
- [09:59]
A
So the things we care overall, the things we care about are time spent in store. And so we just, it's very simple. We just have, when you walk through, there's a little eye that catches your foot and someone walks in, someone walks out. Right. And if you take the difference, if you sum it up and take the difference, you say how many people came in and how long they spend. Right. So we can measure time spent in store. And if time spent in store is increasing, that's our primary metric. Right. We want people spending more time in the store, which means they're playing more. And then the other thing is how many people are coming into the store. Because there's been like a multi decade growth of online taking traffic from brick and mortar retail. And we just turned that around in the last year and a half or so. And we need to see more people coming in the stores, spending more time in the stores. And, and those are the things we're focused. And then the third thing is net promoter scores.
- [10:56]
B
I thought I'd just help us out a little bit. A Net promoter score or NPS measures how likely customers are to recommend a business to others. People rate that likelihood from 0 to 10 and based on their answers, they're grouped as promoters, passives or detractors. The score is calculated by subtracting the percentage of detractors from the percentage of promoters. It's a quick way to understand customers loyalty and overall satisfaction by businesses.
- [11:20]
A
Anyone buys Anything from us anywhere. We survey them and we ask a question. How likely are you to recommend Guitar center to your friends and family? Not like, do you like us? Would you recommend us? How do you score us? Are you going to tell your friends, your close friends and your family to come to Guitar Center? And you only get credit if you rate 9 out of 10 or 10 out of 10, and if you rate 6 or below, it subtracts. And so that is a brutally hard metric. And that's the thing we track, right? So our customers wildly happy with us, and are they spending more time in the store and are more people coming in? And those are our North Star metrics.
- [12:01]
B
So this leads me to. So, okay, so you think that PET has increased pedal sales, too? Not that sales always matter.
- [12:09]
A
Yeah, it went up double digits. So it worked, right. From a sales perspective. But more than anything, we just want people spending time trying stuff.
- [12:18]
B
You get to win. Win. Right. That's a double. So then let's walk over to the spender side. All these guitars are facing the wrong way. Maybe we should go over there and then start walking this way because then they can't. They can't see the candy. They're not going to care about us.
- [12:32]
A
Trust me. Right.
- [12:33]
B
They're going to want to see these guitars. I kind of was hoping when I reached out to you guys, we could talk a year later, like, compare and contrast this.
- [12:41]
A
Yeah, this is perfect timing. Yeah.
- [12:42]
B
I was like, I was just curious. Right. And, you know, it was a lot of ideas to unfold that you unfolded. The sense I got from all the stores was sales are up across all the stores. Every store, even stores were saying that the 20, 26 goals were like, really? They're like, wow, these are pretty aggressive because we did so much better last year. They're like, they're really pushing us, you know, for a bigger goal. And I would ask them, you know, in a different. As many different ways as I could, you know. You know, what do you think that. What's causing that and the commonality. Right. There was all kinds of things, right? You know, one guy's like, I'm just the best salesman in the. In the company. I got that actually, as an answer. So, you know, once it was kind of funny, but he maybe was.
- [13:26]
A
But can I change you guys? Because I. We're just looking at the bathrooms.
- [13:31]
B
Oh, oh, oh, yeah, yeah. Don't.
- [13:33]
A
Yeah, Open bathroom.
- [13:35]
B
So the. But the main thing that we got was more inventory. They said there was more inventory in the stores. They could sell more because There is more to sell.
- [13:46]
A
Yeah.
- [13:47]
B
All the stores had that commonality where it was the smaller stores, because you have the smaller stores, then you have the larger platinum kind of room stores and stuff. You must have increased inventory, especially in stores.
- [13:56]
A
So when we were touring around the country and visiting stores, there were some stores that had really good inventory positions, good product. There were a ton of stores that just like, I just felt terrible, right? I mean, the assortment was small. It was mostly entry level stuff. And at the time, there was an assumption in our merchant organization that small store equals shitty store, small store equals you don't have customers. And that was just not true. Right. Like, first of all, every single customer in the United States deserves a great experience. It doesn't matter if you're in a big market or small market, when you walk into a guitar center, there is an expectation that we should take your breath away. And that was not the culture. And so the first thing we did is, is. And they always, like, when our merchants would talk about, oh, we have this new guitar and this new exclusive and whatever, and they're showing off all this stuff, I'm like, okay, where is that? It's like, oh, it's in our top five stores. I'm like, I don't care about our top five stores. They already have a great assortment. I just don't care. I don't like. I love Hollywood. It's the best guitar store in the world. I don't care about Hollywood. Tell me what's happening in Peoria, right? Tell me what's happening in our 300th store, our smallest store. I want to walk into that store and be proud to be in a guitar center. And you have no idea how hard it was to change that culture. And. And I only. The only thing, we would set our. We created a mock store, the Beacon. And we would set the Beacon. I'm like, don't show me what's in Hollywood. Don't show me what's in our average store. Show me what's in our smallest store. Let's walk like. And then they tried to, like, double face stuff to make it look better. And I said, bullshit. Right? Take that out. Right? I want the experience in our smallest store.
- [15:52]
B
Right?
- [15:52]
A
And I want to be proud of this.
- [15:54]
B
Right?
- [15:54]
A
And we did that and we finally got everybody to like, okay, when I walk into our smallest store, we have a legit assortment there. And then you can start to build from there. Then you're like, okay, great. Now what's the next biggest store look like? What's the Next. And you get up, and then you work your way up to Hollywood, not from Hollywood back.
- [16:10]
B
So let's go to a negative, right? The negative still is your system. And not because it's old. I mean, that's a pot. That's the system. The problem that I experienced, and I made fun of this, you might have saw it on the Internet. And I apologize. Maybe.
- [16:24]
A
Maybe is bring the truth.
- [16:27]
B
It's consistent. So that's what I'm saying. You go to every store. It doesn't matter if it's your platinum store as your small store. The consistency is the system becomes a gunk up real fast. Like, I have an example. Think with this. I have a friend, he's one of my closest friends. He's a orthopedic surgeon, okay? And he told me that. And when we were in a guitar center for two hours, and he told me it was. It was more traumatic than an ER watching what was happening, which was the store went from. So we're in the store, obviously it's not open yet. It went from this to chaos in seconds. Just tons of people everywhere, right? Salesmen are just helping everybody. Everything's going. And here's what we noticed. You can come into a guitar center and. And depending on that time, that little window of chaos, you could come in, pick an item out, ring up, leave, have a normal retail experience. Or you could be standing behind the counter upset. Cause it's been 15 minutes and you're just not getting through the line. And it's not even how many people. Sometimes it's what the problem that happens in front of you is. It's almost like you can predict it. Like if somebody in front of you goes, I want to trade something in. Oh, you're done. You're not getting your picks now. Like, you're just know this is over. Or if somebody's returning something, again, anything. And here's what I noticed. There's. And again, I don't know. I'm just telling you my observation. You must have what looks to me two systems. Because I'm watching employees not only try to operate two systems, but then they have to take another employee's terminal because they're using one terminal here. And they're like, hey, I got to use your terminal to do this thing while I'm doing. And they were transferring because I experienced it a couple times myself when I bought something online and went to exchange it. And whatever it was, it really gunked up. And then I felt. I felt so, you know, as a customer, I felt absolutely Horrible. Especially because I'm a YouTuber. So I'm thinking there's people looking at me like I just jacked up everybody's day. And for me, it was a little more pressure because I was like, oh, they think that I thought they were gonna think I got special service, you know, like they. Because I'm on YouTube. But really it was just my problem just hosed out everybody's afternoon. So the system is definitely the weak
- [18:37]
A
spot, if you think about what that does that like all that time. So it takes 27 minutes, 28 minutes to buy in a used piece of equipment. And so you mentioned multiple systems. So a lot of that can be done on the phone. So it's a lot easier to take pictures, upload pictures. But some of that has to be done on the green screen. Right. And then when you go to pay the customer, it needs to actually go into the manager's office and they need to cut a real physical check. Right, right. And so those three steps take 27 minutes. And we're moving that entire process to the phone. We're automating because like every store, because we buy used, we're technically, every single store is an individual pawn shop. Right. That all has to be uploaded to the state systems. That's duplication of work. So we just automated, just released it, all that duplication. So that took five minutes out. We're taking all the payment stuff. We're going to make it digital. Like the whole thing is going to go from 27 minutes to 13 minutes. Right.
- [19:43]
B
That would be amazing. I mean, that's literally a totally different customer experience if you do that.
- [19:46]
A
And that's just one example of like overcoming 60 years of technology. Legacy garbage systems. Just like we're just peeling the onion layer by layer of just what's the next worst thing our associates have to deal with and our customers have to deal with and let's fix that. And then we go to the next and the next. There's a whole bunch of stuff that happens in the warehouse. Like when we receive stuff, it takes like an hour to just go through and in our system and say, okay, I, I actually received it. This was sent, I received it. Like, enter all that in takes an hour, hour. That's now going to be like a one, one scan and it's going to be like five minutes. Right. So it's just piece after piece unwinding these terrible, awful systems that make these sales associates and operations associates lives miserable. And. Yeah, but. And what that means is like, all that time is not spent with you as the customer, all that time is not spent with you, checking you out. And as we get better at that, then we're not going to cut hours. We're just going to put those hours onto the floor so you can spend more time with customers. So what you're saying is absolutely true. Right. But it's also like this is in the bullseye of what we're going after, is just piece after piece after piece taking the gunk out of the system so it's easier for our associates to service our customers. Totally true. But also making lots of progress.
- [21:07]
B
Okay. Because like I said, we talked about it briefly last year too, and I know you're aware of the system. Like I said, there's no concern that I have that he's like, he has no idea. I know you have an idea, but it was different being aware of it like I was last year and then experiencing it multiple times. I was like. Cause it was consistent everywhere I was going. I was like, oh, I could be in and out in a second or I could be in and out an hour. And it literally could just, like I said, happen so fast.
- [21:32]
A
Yeah. And it's really frustrating for customers when that happens. You know, the other thing is, as we make it easier, you know, to service customers, but also not have to tie the transaction to the cash register. Yep. Right. So we can. We can check you out anywhere on the floor. Now the thing we, like, we're really focused on is making sure the associates are out on the floor with customers and not just hanging out at the cash register. Right. So that was, that was a chronic behavior we had there. We just wait to check you out. It's like, it's not your job. Your job is to go help customers. It's not to just be a cash register person. It's like you have all this knowledge, like, go help people make good decisions. And, you know, we want our associates to be out on the floor, out with customers, checking them out on the floor. Right. There was a few things. You still have to go to the registrar, but mostly you don't. And that's. That's the goal.
- [22:23]
B
One of the things that you've implemented with the, hey, have fun with the guitars. Yeah. Which is great. But the reality is then you have damage.
- [22:31]
A
Then you have damage.
- [22:32]
B
Yeah.
- [22:32]
A
Okay.
- [22:32]
B
I guess my question isn't to about that. It's just that I'm giving you the context of where this question comes from. You gotta accept, I think at this point that there's just gonna be bumps and bruises on Guitars by letting them. So have you guys thought about a system, a discount system or a way to. What do you do with that inventory? Because here's my concern. I actually have a concern. Has nothing to do with me. Yeah, you have an amazing return policy. So like, I mean there's, I could buy the guitar if I have any problem. I got 45 days. Your return policy, by the way, you have noticed I have no complaints. It's the most bulletproof, amazing return policy ever. So that's where you win. That's where you're, you're actually kicking ass in every category. Because no one can do that. I mean no one can buy anything online. Just walk in the store and return it effortlessly. And you most, you know, the mid sized stores don't have that kind of power to say, hey, you have any problems, just return it. But then I go, I wonder what would happen if somebody came in who doesn't know what they're looking at. They're not inspecting the guitar. So that's why I said my concern is actually not so much that you don't have a negotiation policy. It's protection customers. Like a customer can come in and buy a brand new guitar that's actually been demo damaged.
- [23:41]
A
Right.
- [23:42]
B
And if they pay full price, I actually think that's kind of wrong. I think you guys should be responsible to help that customer with that problem. They shouldn't have to figure it out on their own.
- [23:51]
A
Totally. And our associates, our store managers are fully empowered to take care of the customer. And if there's some significant or material damage, then they are fully empowered to make that right and to negotiate. And what you don't want is people coming in and taking a quarter and making a scratch and then getting $200 off. Right. Sure. You don't want like anything like that, but, but at the end of the day, like if there's, if there's inadvertent damage on the guitars and the store managers are empowered to, you know, make that right.
- [24:30]
B
Okay. Yeah. Because in my case, in my particular case, they, you could, I could just tell they didn't know what to, to do. Right. It was very apparent that there was no they.
- [24:41]
A
When was that?
- [24:43]
B
Oh, it was February.
- [24:45]
A
Okay. So we've been rolling out a program. It's called the sound of service. It's an acronym. I can't remember exactly what all the S O u n DS are, but it really is about empowerment and challenging our associates and our store leadership to do the right thing for the customer. And it really comes down to Use good judgment. Think about it from the customer's perspective and do the right thing. And that's, you know, becoming part of our culture. You know, not everything is gonna be perfect. It does require a lot of judgment. But that is something we're really leaning into, is just like, put yourself in the customer shoes and like, what do you think the right decision is? And hopefully they, like, can use that guidance to make good decisions on something like this.
- [25:37]
B
The problem is it's twofold. You're letting everybody touch the guitars, which means you're going to increase the amount of wear on the guitars.
- [25:43]
A
That's true.
- [25:44]
B
If you start discounting, we look, if you say it, they won't believe you. I hope they believe me. There's no margins. They're just microscopic. Right, okay. Compared to other if, just, just so,
- [25:54]
A
you know, like, if you want to go make money as a company, don't sell guitars.
- [25:57]
B
Yeah, exactly.
- [25:58]
A
It's a very thin margin business.
- [25:59]
B
Very thin margin.
- [26:00]
A
It's not particularly profitable, but it's a, it's a passion.
- [26:03]
B
And so I was thinking about when you guys do the ring up, that's usually when the pro coverage discussion comes in. Yep. Okay. By the way, pro coverage works. I, I, again, I, I will ding you on anything I want to complain about, because I'm just that way. But your wins are your wins. Your return policy is bulletproof. Your pro coverage, bulletproof. Literally saved me fifteen hundred dollars.
- [26:27]
A
Nice.
- [26:28]
B
Michael Nielsen, the same guy I was talking about, he bought a Dave Grohl epiphone from you guys. I remember when he bought it, he said, yeah, I bought the pro coverage. He goes, I don't know why, I just did it like an idiot. I'm like, oh. And then here's what happened. He shipped it to me after he had it. He made a video with it. He shipped it to me to make a video. The headstock broke off and I feel bad. So I was like, I'll just pay for it. And he's like, okay. He's like, oh, I bought that pro coverage. He goes, but it's not going to cover it. And I go. He went in. And you guys are like, it's covered.
- [26:56]
A
Yep. Absolutely. Great.
- [26:57]
B
Yeah. And I was like, so again. So what I was thinking about was, so. I don't know what. Pro coverage.
- [27:03]
A
What a cool guitar, too.
- [27:04]
B
Yeah, yeah, right? It was like, well, you know. And of course, it's heartbreaking to watch it. They just destroyed.
- [27:08]
A
Right.
- [27:08]
B
Cuz, you know, FedEx hate your guitar sometimes. I won't pick on them. Too ups. They all hate your guitars. The. But pro coverage I would assume is a percent when you bring it up because it's not the same price. It's not like you have a flat rate pro coverage. It seems like a percentage of the guitar. Right. I don't know what that percentage is. I didn't really pay attention. Have you ever thought about with worn product, they just can come with pro coverage. Does it make sense or something like that? Because it might not even be something you actually have to give to the customer as a discount. Pro coverage really only affects you. It's a loss because you're giving away an item you can upsell. Right. Or maybe you get a discount on pro coverage if that item is where. Right. Because here's why. Here's something that I thought about kind of released together. Yeah. I'm going to say something crazy. The guitar that I had had a chip on the headstock. So obviously somebody lifted it and hit.
- [27:58]
A
Okay.
- [28:00]
B
So then I started thinking about this. This is what I said about protecting customers. What if that headstock snaps three months later? Right. Because it was impacted by a customer who just didn't care. Right. That's why I said the discounting might apply because again, you have a demoed or damaged product, but if they had pro coverage, they'd be covered for that. Make sense?
- [28:22]
A
Yeah, I hear you.
- [28:23]
B
So that's where I'm kind of asking. That might be a compromise solution. Not that you have to decide that obviously in front of camera, but I'm just giving you the information because I've been, you get a car, you get a car. Well, it's been. It's been really perplexing for me because I want to bitch about this to you, but I also don't want to give you a problem without any kind of solution or just say, fix this, because I think you should do everything for everyone.
- [28:46]
A
So. So I totally hear you. And when we decided to unlock the car, the guitars, we knew two things would happen. Theft would go up and wear would go up. We also knew people would spend a lot more time in our stores and they'd have a lot more fun. And ideally, sales would go up. And they. And they have. I hear you. On the wear question. The first answer is that our store associates and managers are empowered to do right by you.
- [29:18]
B
Right.
- [29:18]
A
So if the instrument is damaged, they are empowered to work with you. Some good ideas. So let me take that back and let me think about it. Right. So is there something more systemic or structured we could do or something like that, Yeah, I totally hear you on that. So great ideas and thank you for that.
- [29:38]
B
Okay, last ready? Yeah. This is the worst one. You know, it's gonna be fun.
- [29:43]
A
Okay.
- [29:43]
B
We're talking about the new guitar brand.
- [29:45]
A
Okay. I, I, I, I, I watched a meaningful portion of your two hour segment.
- [29:50]
B
Oh, yes.
- [29:50]
A
Yelling about the new guitar brand.
- [29:52]
B
It was fun. I, I will tell you, I would tell you what I told Dan. If I didn't like you, I wouldn't rant. I don't talk about people I don't like. It's just, it's a waste of your time and your, your, your mind time.
- [30:03]
A
Right.
- [30:04]
B
Okay, now, so let's start with the problem. So I can give you a little bit of caveat. I met with the Mitchell guys yesterday, as you know.
- [30:10]
A
Yeah.
- [30:11]
B
Now I have a problem. Although we did not talk about that in any way. That was top secret, the G14 classified.
- [30:17]
A
Okay.
- [30:18]
B
We did talk about some future ideas for Mitchell. After meeting those guys, I can tell you I have a little bit more confidence in your crazy now. Right? Because those guys, I have a lot of respect for those guys I met yesterday. I, I, I was for fun and wanted to punch holes in their stuff. I couldn't come up with one, which is a tough, tough thing to do. And that's just on the Mitchell ideas. Right. Which is different from what your guys are thinking about this. My complaint, so if you caught it was what I love about last year's conversation is you might have, might have watched it probably. Hopefully not. I hung out with the CEO of Sweetwater. That was because compare contrast, right? I go, hey, I talked to you. Let's talk Sweetwater. You do guy. You two guys do kind of run half this market, right? It's, you're pretty, you know, present. You know, your changes affect the industry for sure. Right. But it was tough because I didn't really have a lot of subject to talk to him about. Okay. What I liked about what we talked about last time was you seem very forthcoming with information, but also you seem like you have a goal, a mission. This is your action plan. You, you're convinced you can do it, right? That's all it really matters to me is whether what everybody else thinks doesn't matter. It's what you think. Obviously, for that, when you decided to go, hey, we're gonna make a new guitar brand, I'm like, wait, no, no, no, no, no, no. I look, and by the way, just so you know, I know you're the CEO and you're not actually running every Like, I know you're not ringing out customers during the day and trying to figure out where the company goes tomorrow. Like, I know that you can have different department.
- [31:51]
A
I'm not designing bridges. And yeah, I know.
- [31:55]
B
I know you can do multiple things. I'm not naive that way. What I mean is, optically, you have you going, I'm going to turn this giant ship, which is a massive task. I'm going to improve it. And then when you said, hey, I'm starting a guitar brand, no one cares that you start. When I say, no one cares, no one's the guy. Even if people pretend they were upset about that. I'm not upset you're starting a guitar brand, Neither did. No one should be upset. If you're starting a guitar brand, you can do whatever you want and you have enough money and power to make it right. Yeah, you know the market, you can obviously figure it out. It's not rocket science. It's guitar science, which is not as nearly as complicated. The concern I had, and I think some people felt was, oh, no, don't stop fixing the thing we love, which is these stores. You know, keep your. Your eye on the ball kind of thing. So that's our fear, is that, yeah, this is going to be your new toy. Right. And then this will take, you know, and we don't want you to lose the excitement you have for pedal stations or improving customer experience.
- [32:55]
A
So 100% fair concern. We are going to, like, win or die based on the experience we deliver in the stores and online. That has to be the core of everything we do. Right. And it is. We talked about Net Promoter Score. Retail is usually 30 to 40 is a typical range for net promoter score. 50s gets to good, 60s gets to really good grade. 70s is like Apple and Costco. When I took over our Net Promoter Score, that quarter, I believe, was 54.
- [33:47]
B
So it's good.
- [33:48]
A
But it was okay. Right. Which means some people had great experiences, some people had crappy experiences, and it netted out to 54. It is now in April of 2026, which is where we are. Last day of April. It is now 67, and we are on the cusp of rarefied error. That is the purest metric of how we are doing for our customers. So I am unsatisfied with 67 because I know we can be much higher. I know we can be with Apple. That's what we're going for. That's what we have to deliver. I promise you, we are not going to stop until you think of us. Just Like Apple, we didn't talk that much about our store associates, but you know, I gave our team a deadline which is as of July this year, we will hire 0 people externally for any management positions.
- [34:49]
B
Oh, nice.
- [34:49]
A
And it was like half right. We are only going to promote from within. Now what do you have to do? You actually have to train people so they're ready for that. So we put in these incredible training programs to develop our associates up to sales managers and then those sales managers get cross trained on operations and lessons and then they get there's a path to store manager and then there's a whole leadership development program from store managers to district managers. So that infrastructure didn't exist before. That's all there, all that sales associate stuff. And that's what translates to net promoter score. Because when you build that culture internally of investing in your employees, they invest in your customers. So I promise you that's not going to happen. Now why are we going to build a new guitar brand? Because our private brands team, the Mitchell team, they came to me and they said, hey, we're going to launch a new guitar. It looks just like a telly. And it's a telly, but it's not called telly. I'm like, reject it. No, this is stupid. Like, there's a great telly out there. It's made by Fender. It's an amazing, amazing guitar. The world doesn't need another Tele clone.
- [35:59]
B
Right?
- [35:59]
A
Right. And doesn't need another Stratocaster clone. It doesn't need another Les Paul clone. It just doesn't. Like all big companies like Guitar center, like Toman or whatever, in Europe, they've got their own private brand. Sweetwater's got a few private brands. It's what you do, right? You create private brands. And. But all those private brands are just knockoffs of something else. And I'm just like, the world just doesn't need that. We don't need another knockoff. Why don't we guys try to do something exceptional and why don't we do it out loud in public and start with customer feedback. Now I think you made a comment of like Bodie McBell face. Yeah. You know, basically you're going to get the Homer Simpson car. If you take everybody.
- [36:42]
B
That wasn't me, but that was a lot of the people that reacted to what I said.
- [36:45]
A
And fine, but would you rather you don't listen at all? And actually, like, first of all, like, every opinion out there is out there and it's from here to here. And so you're going to have to make choices. You can't just do. Please everybody. Right. There's been some really cool ideas. Right. And some of it is novel. Some of it's just like, hey, man, this guy in the 80s designed this nut, and it is so amazing. And you're like, holy shit, that is pretty cool. Like, let's take a look at that. And so we're taking information from Reddit, from Instagram, we're taking information. We're getting some really legendary guitarists to come in and consult with us. We're doing focus groups, and we're taking. And I said to our team, like, we're not going to build something if it isn't awesome. And I don't want something that looks like or feels like anything else. And if you want to do that, let's just put our energy somewhere else. And so that's where we are. We're right in the middle of it. We're like, we got all kinds of prototypes. There's sawdust, there's like, you know, we're filing shit down. We're trying different pickups. Like, we just had a whole conversation yesterday on pickups. And our goal is to come up with something that doesn't look like a telly and a Strat that actually is, like, reasonably priced. Right. So it's going to probably be in the 700 to 900 range.
- [38:03]
B
Right?
- [38:04]
A
Right. So a good, solid, quality guitar, not some $200 knockoff. Right. That is meaningfully better and differentiated. That is like your workhorse guitar that you can take to indie gig and travel with and is versatile. And it's like, that's what we're going for. And then we'll probably also do a second model that is just like, radically out there on the technology front. Right, Right. And so we're going to push the bounds of technology, and then we're going to push the balance of analog. And that's the thinking right now. And don't hold it to me, because it's not done and we're still listening and we're dealing with customers. So we could have either just done a knockoff like everybody else did, and the world just doesn't need that, or we could just try and do something that would be awesome for our customers.
- [38:44]
B
Yeah, I mean, I get it. Like I said, I have no doubt that you could come up with something. I mean, like I said, you have resources. Just the resources behind you. And like you said, and your. You seem to be very focused on whatever you want to do. Seems to happen. Right. I Mean, I could see everything that you can't talk about comes in somehow comes into fruition, right? But. And I think you get it. That's the one thing. When I. I was. Because, you know, we had planned this before you made that announcement with that day you made the announcement, I was like, oh, you got to be kidding. I gotta meet with him next month. And I'm like, what is going on?
- [39:15]
A
And I'm like, I welcome the feedback. Look, I. I'm not afraid of. Of. Of criticism because, like, I really listen and I hear you and like, you know, and anyone on the team will. Will tell you, like, I listen, and I will often kind of course correct or adjust or change my mind if someone has a better idea. Right. I'm not someone who thinks I know everything. And so I appreciate the criticism. I appreciate the criticism on the, the wear and tear. I appreciate, like, that's all good, good feedback. And it makes me think. Your pro coverage, you know, thought is making me think. And ultimately, all I care about is, like, I don't care whose idea it is. We make the right decisions and do the best thing for the company and for the customer, and we just push this thing forward. So I appreciate the criticism.
- [40:05]
B
I like to beat you up publicly. I was telling Dan this. I like it for the reason you don't think. So let me just tell you why. So I know so many people in this industry. Obviously, at this point, 8 out of 10 CEOs would ban me for whatever I say. Heck, one response to A criticism once they community strike me on YouTube.
- [40:25]
A
Yeah, right.
- [40:25]
B
It was like, ah, you gotta be kidding me. So I get it. You take. You take the punches. I mean, that's why. So, you know, unfortunately for you, this is. This is my. This is my advice as a content creator to you because now you're doing your podcast and stuff, so I'll just let you know. The Internet's mean generally. Yeah, right?
- [40:43]
A
Yeah.
- [40:43]
B
But if they say that you'll take it on the chin, they'll give it to you a little harder. That's how I give it to you, a little harder. Because I know you'll actually hear it. Like, I don't. In my head, there's times when I get off my podcast and my wife goes, oh, you're gonna phone call tomorrow. I go, I know, I know. I was halfway and I almost stopped myself where when I talk about you,
- [41:01]
A
I go, yeah, but that's what makes you great. You can't be. You can't have the trust of your audience if you're not just like brutally honest.
- [41:10]
B
Yeah.
- [41:10]
A
Right. And so.
- [41:11]
B
And that. And what's great about that is like, so I'm just giving you a compliment to your credit. You take all the feedback. Honestly, you take it, take it really well. I don't. I would probably have been mad at a couple things for sure. And. But here's what's. And that's why I. And like I said. And I was hoping you would say, you said actually, by the way, the perfect answer that what I was hoping you would say. It was explained that you're still working because I think you guys have in this last year, Guitar center has without a doubt, you can see it in the comment sections. The community as a whole, the community thinks Guitar center is better than. And it wasn't that it was bad before, it's just. It's better. It's a better thing. It's just everybody believes, including you, obviously, it could still be better.
- [41:53]
A
It can, absolutely.
- [41:54]
B
Yeah.
- [41:55]
A
Yeah. And I would never pretend that like, we are delivering like a perfect experience every day in every store for every customer. Right. And that bothers me. Right. I want us to delight our customers every single interactions. Now sometimes people are crazy and you can't satisfy them. Right. But like, I want us to be there with our customers and understanding, like putting, like, if you just put yourself in the customer's position and you empathetically think about where you're coming from, you will almost always make the right decision. Right. And so like, that's what we're working on here. And then that's what I do when I like visit stores, when I'm pushing on our merchants, when I'm pushing on. Which our merchants are awesome, by the way. Like, I love them. I gave them a little shit earlier. But like, they're really passionate and they're pushing. But like the furniture over here, like, this is version one of our furniture. And it's not good enough. Right? And so like, but it's not good enough because like, we came and like we sat in it and we're like, oh, this is a little too soft and a little too low. And if you're like trying to, like, it's empathetic, you're putting yourself in the shoes of the customer and you're saying, how can we make a better decision for the customer so it's a better experience. And like, if you just do that, you'll be fine.
- [43:13]
B
Yeah. Well, I appreciate it. Thank you, Gabe.
- [43:16]
A
Thank you.
- [43:17]
B
This is great. I like that. We were. And by the way, again, to Gabe's credit, I like that we were able to talk last year and then now talk again and.
- [43:25]
A
And we'll have to do it again next year and hopefully we have some, like, additional. Additional complaints, but also additional progress we can talk about.
- [43:32]
B
Yeah, well, you know what's fun is it's. I love the idea and I think it's. It's getting hard. It's going to get harder because I will have less to about.
- [43:39]
A
That's a good thing.
- [43:41]
B
All right, on that note, thanks, guys and thank you for your time and know your gear.
- [43:46]
A
Thank you.
- [43:50]
B
And action. I'm just kidding.
- [43:51]
A
You gotta do this thing.
- [43:52]
B
Yeah.